Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles and Opportunities

James Archsmith, Erich Muehlegger and David Rapson

No 28933, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper identifies and quantifies major determinants of future electric vehicle (EV) demand in order to inform widely-held aspirations for market growth. Our model compares three channels that will affect EV market share in the United States from 2020-2035: intrinsic (no-subsidy) EV demand growth, net-of-subsidy EV cost declines (e.g. batteries), and government subsidies. Geographic variation in preferences for sedans and light trucks highlights the importance of viable EV alternatives to conventional light trucks; belief in climate change is highly correlated with EV adoption patterns; and the first $500 billion in cumulative nationwide EV subsidies is associated a 7-10 percent increase in EV market share in 2035, an effect that diminishes as subsidies increase. The rate of intrinsic demand growth dwarfs the impact of demand-side subsidies and battery cost declines, highlighting the importance of non-monetary factors (e.g. charging infrastructure, product quality and/or cultural acceptance) on EV demand.

JEL-codes: H23 Q47 Q48 Q5 R4 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-tre
Note: EEE
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Citations: View citations in EconPapers (6)

Published as Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles, and Opportunities , James Archsmith, Erich Muehlegger, David S. Rapson. in Environmental and Energy Policy and the Economy, volume 3 , Kotchen, Deryugina, and Stock. 2022

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Journal Article: Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles, and Opportunities (2022)
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